There were some fireworks in last week’s markets—corn futures jerked feeder futures around most of the short week—but in the end it was mostly a fizzle.
Cash fed cattle trade got underway last week like cattle traders had a lit firework under them. After a day and a half of nothing, late Tuesday saw thousands of head sell. That continued on Wednesday. By the 2 p.m. USDA cattle slaughter report, just over 48,200 head of negotiated cash fed cattle had been confirmed sold for the week.
Prices on Wednesday were $108-115 (average $110.74) live and $180-181 ($180.16) dressed. This was a strong steady on live prices compared to the prior week’s average and up about $1.50 for dressed.
The holiday-shortened trade week certainly had something to do with the stronger-than-expected prices. Packers were buying for a full slaughter schedule and had relatively little time to do it.
Live cattle futures also had a hand in this, seeing triple-digit gains on Wednesday, and posting week-to-week gains of about $1. By close of trade on Wednesday’s shortened trade week, the August live cattle contract had settled at $105.45 and October at $106.30.
The cutouts were down week-to-week after yo-yoing. On Wednesday’s close, the Choice cutout had lost a net 41 cents with $219.25, and the Select cutout had lost a net 20 cents with $195.36.
“Beef cutout values have garnered some temporary support from the holiday-shortened production schedule, estimated to be 560,000-570,000 head,” Andrew Gottschalk of Hedgers Edge reported on Wednesday.
“Post-July 4th, the initial downside objective is $215, followed by a potential $205 summer low for Choice values.”
He went on to estimate the upcoming Cattle on Feed report—due out July 19—as up 2.5 percent on on-feed populations as of July 2, up 2.4 percent on placements during June, and marketings during June down 3 percent.
Very few feeder cattle auctions reported in last week due to the Fourth of July holiday. Only two of the big, early-week sales had anything to offer while most other sales took a break.
On the one hand, the Joplin Regional Stockyards of Carthage, MO sold 5,985 head of feeders on Monday, July 1. This was just over half the volume the sale sold the week before. Steer and heifer feeders were called steady. Steer calves over 500 lbs. were called steady to $3 higher, while heifer calves under 500 lbs. were down $2-4.
Demand at Joplin was called moderate to good. Most of the medium and large #1 class steers were in the 600-700 lbs. weight range. Number 1, 7-weight steers were widely available as well, with prices ranging from $130 at the low for some unweaned calves to a high of $144 for a 58-head lot of 758-lb. yearlings.
On the other hand, the Oklahoma National Stockyards sold 5,353 head of feeders, down a bit from the previous week’s 7,121 head. The sale’s report listed all classes of feeders as lightly tested. Generally, steers were up $2-4 for yearlings and $2-5 for calves, and heifers were up $1-3 for yearlings and steady to up $2 for calves.
“Short weaned or unweaned calves sold at a sharp decline from the weaned calves,” the report noted, crediting the heat and humidity for that limited interest in risky cattle.
“Demand good to very good for feeders and long weaned cattle.”
Several lots of #1, 7-weight steers sold. Yearling steers sold between $138-146 while the unweaned lots and the one 13-head lot of “full” yearlings sold between $125-133.
Near-term feeder futures gave market watchers a fun ride last week. After crashing the prior week, last week saw the near-term feeder contracts claw their way back up on Monday and Tuesday, only to post triple-digit losses again on Wednesday.
None of this back and forth in day-to-day trade showed through in the seemingly sideways numbers on Wednesday. By close of trade, the August contract lost a net 27 cents with a settle of $136.58. The October contract gained a net 15 cents with $136.95. — Kerry Halladay, WLJ editor
